The Strategy for Economic Reform in a Globalised World continues....

Today, globalization is a powerful and fast emerging global reality that has already acquired an irresistible momentum of its own. At present about one-fifth of the gods produced in the world are traded internationally, and about US $ 1.5 trillion is exchanged daily in currency markets. It is a theme of this address that each country should devise its own strategy that takes into account local factors and constraints to “sail with the wind” of globalization, in the direction that this strategy sets, rather than confront the process itself and tilt against the wind. There are in such an approach advantages that have to be seized and maximized as well as risks that have to be addressed and minimized.

It is to be noted that while growth in GDP and trade vastly accelerated with each stage of globalization, world income however has become much more unequally distributed. The ratio of the income accounted by the top 20 per cent of nations of the world to that for the bottom 20 per cent, rose from 3 : 1 in 1820 to 30 : 1 in 1970 to 86 : 1 in 1998. This trend can continue into the 21st century, since the globalization process, as structured today, will create fault lines between groups of nations that have, and those that have not, the skills and mobility to flourish in the knowledge based information technology paradigm. Unless these fault lines are repaired, the widening disparity amongst nations will continue at an even faster pace because of which the world will risk social unheaval. And since these fault lines are replicated within nations, between educated elite and non-elite groups, the same potential for upheaval will exist internally too. Thus more than the spread and accessibility to capital, what is required in the new stage of globalization is the dissemination of knowledge and know-how to the poor and under privileged. How this will be done is an essential part of coping with globalization’s negative impact.

to be continued...

( This account is maintained by Har Anand Publication)